Episode #5 How to Find the Perfect Technical Co-Founder w⧸ Chris Taylor, Founder of Actionable.co
Episode Stats
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Summary
In this episode of the podcast, I sit down with a good friend of mine, Chris, to talk about how he built a company from the ground up. He s been crushing it in the startup space for a long time, and now he s building a business that s on track to hit $100M in revenue. We talk about the economics of the business, how to scale up, and how to leverage the power of 10X when it comes to recruiting, hiring, and retaining top talent.
Transcript
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I think you guys are gonna love this conversation.
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We talk about understanding the economics of the business,
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how to scale up, especially when you have a setup fee,
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and then also a monthly reoccurring revenue model.
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The quick way to network your way into other investors.
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If you're listening really well, you're gonna get that.
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the power of 10X, especially in the technical role,
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so if you're gonna build a venture-backed company
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He even shares to me where he has a private tattoo
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So the business, okay, so you're not a corporate guy.
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I appreciate that we're gonna go there a little bit,
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just so I can flex my corporate chops a little bit.
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I feel like I've been tarnished the startup guy.
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And no, I built an enterprise consulting company,
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Yeah, so I love talking about Statements of Works
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And so what we do is we make learning programs,
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on-site learning programs, sticky and measurable
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I had a founder's lunch today with the founders
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There was another one from precisionnutrition.com.
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she has a SaaS business as well, it's super neat.
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But the topic was around this, if I think this is correct.
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This is how do you capture and train your leaders
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Cool, they'll come into your company, teach you stuff,
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and how you guys deliver on that value proposition.
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It's sold through the consultants that we work with.
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then they integrate actionable into their offering,
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Now, are they already selling their own curriculum
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like I want to understand why you started this business.
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I was a sales rep and sales manager early in life.
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And just so you know, I know we've talked before,
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and I'll ask you questions that I know the answers to.
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You know a lot of the Cutco guys that I grew up with.
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Okay, I was wondering why he keeps sending me Cutco knives.
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He sells like a million bucks a year in Cutco knives.
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That's awesome, what a great, now it all makes sense.
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That's the basis of his gifting business, yeah.
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I wasn't a particularly good recruiter, which is most of that business.
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But I was really good at retaining the people that I recruited.
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And I became somewhat obsessed with how do you retain top talent, particularly in a commission-based environment.
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And so when I left that world, I really dug into what it was that led to retention of top people.
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I'm sort of geeked out on that I spent 2008 reading about a hundred business
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books and where the business started was I use you read 2008 you would say like
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in your trajectory that was like I'm gonna I'm gonna learn yeah what did you
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read I read everything from the great yeah yeah yeah all the classics totally
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yeah it's like 25 yeah for sure so I started actionable books to share some
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of the ideas from those popular books so that was a starting point was that
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like a one like a CEO read type thing like a synopsis awesome so Blinkist
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today would be the digital yeah exactly so I'm incredibly in awe of what Blinkist
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did for me yeah yeah because it was never a revenue generator for us no but
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it got me into the space of interacting with a lot of these authors yeah huge
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yeah that's awesome so I read 2008 I interviewed 2009 traveled around the US
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interviewing Seth Godin Patrick Lencioni these types of individuals dude I was
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amazing. I'm jealous. That's super cool. I'm sure they would take your call down. Yeah. I'll have
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to reach out. Yeah. And then I started a little consulting practice off the heels of that. People
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wanted to apply what I was reading. And so I built up this little consulting practice, realized that
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from my standpoint, one of the biggest challenges was you could go do incredible work, but then you'd
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leave. You have to go hustle to find the next gig. You wouldn't know what sort of impact you had. They
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didn't know the direct impact you'd had. And so I built this, and I'm not a coder, but I cobbled
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together a team to build this lightweight software that allowed us to track the behavior.
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We live in a cool world where the APIs are available, and it's really about the creativity.
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Clarity, my previous company, was Facebook Connect, Twilio, and Stripe.
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So where are you at today in regards to the software, the business, traction, just to
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Yeah, so we're doing about $100,000 a month in total revenues.
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About $40,000 of that is MRR, and we have 180 consulting partners around the globe that license it to their clients.
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We had a big breakthrough earlier this year where I was very focused on my own content for a long time.
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Turns out other consultants don't care about my content.
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No, no, but what they wanted is they wanted the technology, right?
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So we've stripped it so that they can put their stuff on it, quasi-white label.
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and that's okay so there was an iteration where you did sell them the thing that they then use
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your technology so so and i see this a lot with kind of like thought leader i call it like
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traditional sass versus thought leader sass thought leader sass essentially is wrapping
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their thought leadership framework in their software yeah but then it kind of doesn't allow
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them to really ask is there value in the core software as a standalone sass yeah because you're
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allowed them to put their own content in there,
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Yeah, so it's a licensing and setup and then they sell.
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Cool, and then what's the kind of lifetime value
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Yeah, I mean we're about 18 months into corporate sales.
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We see about $100 a year in clean revenue to actionable,
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How many years they will continue to use the platform
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What size a company on average would be investing
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with one of your, would you guys call them partners?
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Yeah, so they're investing through one of your partners.
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is it Fortune 2000, is it 50 to 200 employees, what's the...
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No, it's usually more, so they're usually 1,000 employees plus,
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I mean, you've got, just so you know, three years wouldn't be an overly optimistic LTV on that.
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Yeah, like, I mean, if they're going to invest on deploying to that level of employees,
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are most of them, so it's 1,000 employees, but how many of those employees would actually get actionable?
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Well, yeah, so they're starting with really small pilots, right?
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Yeah, that's usually it's a departmental, yeah, and then if they get success, they're going to roll it out.
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Do you guys offer, from a tiered pricing point of view,
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I know I'm getting super nerdy on the economics,
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Do you offer site-wide licenses for your partners
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I work with a lot of clients that have this kind of model.
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And I've seen those challenges, so I kind of get context.
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What would make this an incredible conversation for you?
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I started the company with $2,500, and so everything was that.
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We want to start building our own internal team.
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And so I've been actually through you indirectly.
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And then he's connected me with almost every VC in Canada, which has been great.
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But it's a fascinating place where, I think it's fascinating, we've got a number of firms
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that, you know, there's the ones that say, tell me later.
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Like, I get emails from him at 2 a.m. all the time.
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That's, you know, it's funny how, like, I test vendors often as just like a side note.
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I mean, and look, I don't expect everybody to work on weekends.
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Because I mean, especially for certain people like accounts, lawyers, immigration people,
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Yeah, that's when the shit hits the fan is outside of worked hours.
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So it helped you kind of network into the investor space.
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We're too early for some, we're too late for others.
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Yeah, and so one of the things you're saying is transitioning to an in-house dev team.
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Is that one of the constraints or one of the challenges that they're coming up with?
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It is, and it's this chicken-egg thing, because in my mind, I need the cash to properly finance
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Yeah, so I mean, my analogy to outsource, you know, in the early days, I'm a big fan
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So if you said, I think I've got this interesting growth channel, but my team's kind of strapped
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Literally going Upwork, find some programmer in Eastern Europe and say, hey, here's this
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It's, yeah, so I've always eventually brought it in-house,
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you could start a restaurant by hiring a part-time chef,
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you need a world-class chef as a business partner.
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But the good news is there's a ton of companies
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that are non-technical that start in the same scenario.
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I think the migration plan, if that's the question,
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not knowing what I'm looking for, where to go, I guess,
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where I went literally from an idea to revenue pretty fast
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that I couldn't slow down to bring in a technical co-founder
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but the truth was the people I was reaching out to
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because he is one of the smartest people in the world.
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and then all of a sudden the VCs were coming in
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Because certain people want to be part of the founding idea.
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Now, what I like to use is the founding team member
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that are super critical to the realization of your dream,
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and that would probably be more to where you're at,
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we're essentially a million ARR type of business,
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and we want to now kind of build professional management
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if you're gonna build a venture-backed business,
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Like, what's unique about that versus bootstrap
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is you actually have an ability to incentivize people
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they say, I wanna do profit sharing in my company.
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You essentially wanna turn everybody into a salesperson
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Profit sharing means let them keep getting paid
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what they're doing today and pay them that salary.
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And at the end of the year, look at your profit
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Most of them don't want to do that, so anyways.
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at a discount in the future will be worth more,
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especially if you start down the fundraising path
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which argument, like every time you raise more money,
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there's a higher valuation, the employee stock options
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So, I think if you're, are you willing to be somewhat, like, open to giving equity to?
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I mean, what's, I appreciate there's a massive range within that for a founding member versus a co-founder.
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I mean, even, because I ended up raising $1.6 million.
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And I found a person that was kind of further, like, they came after the fact of raising the capital.
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And I kind of decided I'm willing to give up to 10%, 10% to 15%.
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At the end of the day, for the right person to lead my engineering team, and here's what
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When they get hired, they can bring five other incredible people.
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So if you just hire a really great technical person that doesn't have a bench, that's
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why you want to find people who've been in the industry for like 15 to 20 years that
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have built teams that their teams are just looking for an opportunity of saying, what
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It's like, look, come in and rebuild the platform, right?
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whatever you gotta do, but take your Navy SEALs team
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about like what cool framework they're geeking out on,
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And I think those people exist, and I think most of them,
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it's funny, like IBM's locked up a lot of them,
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like I have friends that still work at Blackberry Rim,
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and they're just on another level of brilliance
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You've got a proven track record as an entrepreneur.
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10 million bucks and take 25, 30% of my company,
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and the right hire should be like relationally accurate.
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That's the Steve Jobs, Steve Wozniak relationship.
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is every one of them started their own company.
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I will not only work with you to create a lot of wealth in your life,
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but I will also teach you how to think about entrepreneurship.
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Yeah, I just, I mean, that's probably the thing I'm most proud of
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is from my company Spheric to Flowtown to Clarity.
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I definitely pulled people that had that entrepreneurial bent.
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So you've got to be a little crazy to come join a startup.
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I always told people, especially maybe not my core founding team people, but other hires
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is come dedicate at least three years of your life to this mission and if you do that, I
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will do everything in my powers to make sure that you achieve your dreams in life.
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And where were you sourcing them from, because do you have a developer background?
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But even without that, I would just, I source off GitHub.
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Back in the day, you used to be able to get, I don't think you can anymore, you used to
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I actually built this whole growth hacking scraper.
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And I outsourced it to Upwork, back then it was Elance.
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And so you could get all the emails and you can get, it was really cool because you can
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get their code commitments over, you can actually get, there was a way for you to quantify or
00:19:45.140
And then in a geography, so then there was arbitrage on hiring from, I remember one guy
00:19:50.980
He's like, what are your salary expectations, 45k a year, awesome, he's easily worth 150,
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we're gonna pay all your relocation expenses, move you to San Francisco and pay you 60.
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So there's some really cool opportunities like that.
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I know where they hang out in this city and I know where they hang out in every city is
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they go to the user groups, they go to the technical events, and what they don't want
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is some business guy showing up saying, you know, glad-handing, and like, here's my business
00:20:19.820
car, I need to hire. What they want is somebody to be passionate about their product, to show
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them that they actually have traction, and that for the right person, there's an incredible
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opportunity, and build that pipeline of potential hires. And the truth is, you know, you might
00:20:34.700
have to talk to a lot of people to find one or two really high-quality candidates, and
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You know, I'm a big fan of, I can't work with you until I work with you.
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So one of my rules is I always map out like a 10-hour project.
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So for a technical person, one of my go-tos for a long time was use the Facebook API,
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analyze this Facebook group, and then tell me which members in that group are the most
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I mean, you need to know a little bit about APIs, but today, if I was thinking of like
00:21:10.580
let's use the, I would probably go to Bitcoin, right?
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I would have them analyze who lost the most money
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because it's all public, and when the price dropped.
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and they're like, oh shit, I'm in this transaction,
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Because why, it has nothing to do with my business.
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So that's the whole point, do something that's not.
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It has to be not, because then there's the argument
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of how much should I pay them for that test project,
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and my whole thing is, hey, this is an opportunity
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Because that's what you want to test in those relationships
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have bad habits where you ask them to do something,
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and they go, ta-da, and you're like, ta-da, that sucks.
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Ta-da, that actually is not what we talked about,
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and I don't know where you took this conversation
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like so let's say like technical sales engineers,
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they have a different level of approaching teams
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because they understand like there's a check-in,
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there's amount of effort that's gonna be invested
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And I'd rather make sure that we're on the same page
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and just go off, code it, and have to rework it.
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So like I would say I always test for communication,
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when they give it back and they're always like,
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I'm saying do what you think is appropriate, right?
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I'm going to trust that you're going to make the best.
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Now, what you want to do on the back end, though,
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is have an advisory board to do the code reviews.
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I know enough to confuse people in a conversation.
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I actually don't know enough to know about quality.
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So I would just reach out to some of my friends and be like, hey.
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And I would just say, like, hey, put your code up on GitHub.
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You know, send me a private URL, and I'll have them do a code review.
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And then, but you do want to test out the expectations up front.
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So, like, I'm a big fan of asking people, like, hey, I know we're just starting this conversation,
00:23:55.420
but if we were to move forward, what would your, you know, your compensation expectations be?
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and you know if they throw back a 250 a year with 20% equity you can just say
00:24:05.540
you know unfortunately we're living on two different planets and it's totally
00:24:10.300
cool and I hope somebody gives it to you because that would be fun it's just not
00:24:13.660
gonna happen here right and sometimes they'll backpedal but honestly if they
00:24:16.720
backpedal or if they threw that out there I would question what logic brought
00:24:21.460
them to that answer yeah and I and that would that would be super red flag
00:24:27.600
Because you don't want people that are deeply undervaluing themselves, or do you?
00:24:32.520
I want, I think that I want people to self-educate themselves.
00:24:37.140
Like, that answer is so out of whack that I would be concerned that the way they learn
00:24:42.420
to get to that answer wouldn't allow them to have the critical thinking skills that
00:24:45.820
hopefully they would have to get to their own answer on big, you know what I mean?
00:24:49.600
Like, on bigger issues and challenges in their work that they're going to have to do.
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like these really technical nerdy things they're gonna have to go and discover how to do that right
00:25:01.300
so that would be that's why it's concerning to me again i've hired 500 plus people in my career so
00:25:06.100
it's kind of like i've seen patterns um particularly with this role right because if it's anything else
00:25:10.900
in the business i can have some sort of input on it but aside from you know that looks good versus
00:25:15.380
doesn't look good i i mean this is this you know i had to do in the early days like as a software
00:25:20.100
background like when i started hiring my first marketing people like i didn't i didn't even
00:25:23.620
you know like how do you hold marketing accountable right like what's the I mean now I could lay down
00:25:28.420
the whole you know like funnel and metrics but like it's nothing to software it's like you're
00:25:32.940
like how would you keep a CTO accountable yeah I don't know no I can tell you you know what I mean
00:25:39.080
like yeah so so it's like for every role you're gonna hire there's best practices there's patterns
00:25:45.440
there's um you know expectations that you would want to understand so that you could manage them
00:25:51.940
But the fun part, you know, what I've discovered, especially, you know, I've read a lot of business books.
00:25:58.940
I've talked, you know, I did over probably 2,000 advice kind of coaching calls now with Entrepreneurs with Clarity at 1,300 just on that platform.
00:26:08.520
Is I've started to see patterns in how to assess for talent.
00:26:15.160
Like I have friends that run manufacturing businesses.
00:26:17.340
I've never like, but yet when I, when I asked them, like, like you, you help with the training,
00:26:24.140
the implementation side, like there's best practices, right? So it's kind of neat how
00:26:27.880
at a high level you can kind of pattern match and create these models and then just apply them to
00:26:32.340
different things. So there's probably ways that you hire and test people that apply to software
00:26:36.680
that you just don't think they apply, but they absolutely apply. Yeah. Right. So because the
00:26:40.820
human dynamics piece is the same. Like they need to be the team player, sort of quintessential
00:26:44.500
team players, they need to communicate effectively, they need to be able to check in, take personal
00:26:48.000
ownership. All those things apply to human beings that I want to work with regardless of what they're
00:26:52.020
doing. But then they also, ideally, they can write code because you don't want them to just sit there
00:26:56.580
and direct. I would be concerned if they're like, I'm an architect. It's like, you're a shitty
00:27:00.840
programmer. Is that what that code means? I think so. Yeah, I'm going to go there with that one.
00:27:07.700
I just have a mean because it's people that don't want to roll their sleeves off. That's like saying
00:27:12.560
I'm a marketing strategy, my big pet peeve right now is the social media experts that
00:27:17.600
are strategists that have never driven real demand or marketing or anything.
00:27:23.640
That to me is, literally I was trying to hire somebody to run social marketing for me and
00:27:29.240
I interviewed a bunch of people and they're like, yeah, I'm really more of a strategist.
00:27:35.080
There was nothing interesting or great yet somehow they wanted to skip the implementation
00:27:43.160
Strategist has become a slightly more socially acceptable guru.
00:27:46.800
And it also, it allows them to not be accountable for outcome.
00:27:51.100
Like, I'm just going to draw you a map and you're going to pay me a lot of money for
00:27:53.480
that, but then you got to go do it and you'll probably do it wrong.
00:27:56.120
So I'm not accountable for you not getting the outcome you want.
00:28:01.860
If we bring this back to the challenges, having somebody that's built platforms that
00:28:08.680
understand like these are the hard pieces that I'm gonna work on and maybe
00:28:12.440
that's 20 30 percent of their time and the rest of it's built on developing
00:28:16.280
their team yeah nice but for somebody to just come in and say I don't want to
00:28:19.780
code anymore that would be huge red flag for me yeah and it doesn't fit for
00:28:23.680
it's like like hiring a marketing manager says I don't want to write copy
00:28:26.440
right it's like well is it because you suck well you know what I mean like how
00:28:31.660
do you not write copy it's like I don't know I write emails copy like I don't
00:28:35.120
You know, it's like, you can't, you can't, like, how do I post something on Instagram and not think about copy?
00:28:41.240
I think the same thing for, especially for somebody that you want to lead your technical team.
00:28:45.420
Like, like, I know CEOs of technical companies that still write code.
00:28:56.820
Yeah, like, why would you get rid of something that you love?
00:28:58.660
What you want to do is build a team around you that's going to free up your time so you can do that thing,
00:29:02.120
especially if you're, like, you know, genius level at it.
00:29:07.940
people that are that great are definitely 10x better
00:29:17.200
And the reason why, and this is the most beautiful thing,
00:29:26.780
Luckily I know how to hire and retain those people.
00:29:29.860
Is because there's something about the way their mind works
00:29:32.580
where they know when to invest in building tools
00:29:45.040
and record their screen and narrate what I'm seeing
00:29:53.060
this guy built a machine, essentially it was OCR,
00:30:01.840
The sign's in Spanish, and it translates to English.
00:30:04.420
His name was Otavio, built Quest Visual, sold it to Google.
00:30:08.860
And when I first saw it, I thought, okay, buddy, I'm not an idiot.
00:30:13.860
And he pulled up the C++, which is a super nerdy technical.
00:30:21.380
He pre-recorded it, and it's not real, and it won't work if you change the font.
00:30:29.780
and as soon as he showed it to me I said well show me how you developed it and then he showed
00:30:34.620
me the um he built a separate tool like there was the code for the quest visual and then there was
00:30:40.800
a code to debug the system because what it did is it actually ran his algorithms in real time
00:30:47.120
through different he had like one pane that was for the the the changing the text to figure out
00:30:53.700
what was text yeah right he had that part and it had like a number of like how accurate it was
00:30:58.420
And then he had another pane that was like removing all the text that it found and creating
00:31:07.160
It was, that's 10x development where they actually count, this is crazy, they count the
00:31:16.920
If you touch your mouse, you're being inefficient.
00:31:18.420
If you want to see an incredible programmer, watch them work.
00:31:22.360
Their screens change and their fingers don't leave.
00:31:25.640
Some of them programming this thing called Vim, that's super nerdy, and if they're in
00:31:28.440
Vim, you know, this guy, like, that's, I mean, maybe more modern, yeah, again, 10x.
00:31:43.420
I find that Dan has not only such a broad knowledge base and skill set, but he's incredibly well
00:31:46.520
connected as well, and he has a passion for all the things that he's engaged in, so he
00:31:50.740
goes ridiculously deep on whatever you want to get into.
00:31:54.040
So for me it's that, it's the combination of passion, breadth, and depth that just makes
00:31:58.920
I think I came in with random thoughts about a couple different areas to go into, the technical
00:32:03.600
hire was sort of buried there somewhere, but being able to dig deep into that I think is
00:32:07.560
hugely useful, getting clarity around what to look for, the whole 10x thing and just
00:32:12.240
thinking about that in any other sphere isn't really a thing, you know, they're incrementally
00:32:16.220
better but understanding that that exists in the world of code is really useful and
00:32:20.700
on the specific advice you want because inevitably Dan could talk for 45 minutes about one topic
00:32:25.560
in depth and it'll all be great, but don't come think you're going to cover a bunch of
00:32:29.020
things because he's going to take you deep on one specific piece.